Our return was late. Does that by itself kill the deduction we claimed?
For the deductions in Part C of Chapter VI-A, yes. Since assessment year 2018-19 s.80AC denies the whole deduction unless the return is furnished on or before the due date in s.139(1). It catches s.80P, s.80-IA to s.80-IE, s.80JJAA, s.80QQB and s.80RRB among others; it does not touch s.80C, s.80D or the other Part B deductions.
Section 80AC is a gate, not a computation rule. It says that where a deduction is admissible under the specified provisions, no deduction shall be allowed unless the assessee furnishes a return of income for the assessment year on or before the due date specified under sub-section (1) of section 139. There is no discretion in it and no proportionate relief - a return filed one day late loses the whole claim.
The section has two lives. As inserted by the Finance Act 2006 it covered only s.80-IA, s.80-IAB, s.80-IB, s.80-IC, s.80-ID and s.80-IE. The department's own reproduction of the section on incometaxindia.gov.in is still the pre-2018 snapshot in that form. The Finance Act 2018 substituted a new s.80AC which extends the condition to any deduction admissible under the heading 'C.-Deductions in respect of certain incomes' of Chapter VI-A - that is the whole block from s.80H to s.80RRB, and it expressly brings in s.80-IAC, s.80-IBA, s.80JJA, s.80JJAA, s.80LA, s.80P, s.80PA, s.80QQB and s.80RRB. The substituted section applies from assessment year 2018-19 onwards.
For a co-operative society this is the single commonest way s.80P is lost, and it is lost before anyone reaches the merits. Societies routinely file late because the statutory audit under the State co-operative societies Act has not been completed, and the ordinary answer - file a belated return under s.139(4) - does not work here, because s.139(4) is not s.139(1). A return filed in response to a s.148 notice does not help either. For assessment years before 2018-19 late filing did not affect s.80P at all, so an officer who applies s.80AC to an older year is applying the wrong version of the section.
What is left is condonation. Section 119(2)(b) lets the Board authorise the admission of a belated claim, and the Board has used it for exactly this problem. Circular 13/2023 dated 26 July 2023 authorises Chief Commissioners and Directors General to condone the delay in filing returns claiming s.80P for assessment years 2018-19 to 2022-23 where the delay was beyond the society's control - typically a delayed statutory audit - and Circular 14/2024 dated 30 October 2024 extends that to assessment year 2023-24 on the same conditions. Those circulars are already covered in this library's concept on s.80P(2)(d) interest from a co-operative bank.
One related trap worth separating out. Section 80AC bars the deduction; it does not by itself decide whether the income was eligible. Both questions get argued together and both have to be won. And note what s.80AC does not reach: s.80C, s.80CCD, s.80D, s.80DD, s.80E, s.80G, s.80TTA and s.80TTB sit under heading B or elsewhere and survive a belated return, subject to the separate point that most of them are unavailable under the default regime in s.115BAC.
A society or an eligible business that misses the s.139(1) date by a day has no argument left on the deduction, however good the claim was. That changes the priority order in a compliance calendar completely: for these assessees the filing date matters more than the audit report, more than the tax payment and more than the correctness of the computation. It also changes what an appeal is worth - once s.80AC has bitten, an appeal on the merits of the deduction is a waste of the fee, and the only live remedy is a condonation application.
I paid advance tax for the year but had not filed my return when the search took place. Can the department still call that income undisclosed?
The CBDT rejected my condonation application without dealing with my reasons. Can I challenge that?
I deducted TDS during the year but paid it after 31 March, though before I filed my return — can the expense still be disallowed under section 40(a)(ia)?
I have given the excise authorities a bank guarantee for unpaid bottling fee. Does that count as actual payment under section 43B - and is bottling fee even covered by section 43B?
The AO cites Citizen Co-operative Society to deny my 80P claim. How far does it go?
Our amalgamation was sanctioned long after the deadline for a revised return. Must the department accept revised returns filed to give effect to the scheme?
We are a state-level co-operative agricultural and rural development bank. Does 80P(4) block our deduction?
My society lends to non-members too. Does that wipe out its 80P(2)(a)(i) deduction?
Every page in this library links to what it was written from, so you can check it rather than take our word for it.